CFTC Issues No-Action Position for Passive Trading Software Providers
The US Commodity Futures Trading Commission (CFTC) has issued a no-action position for providers of passive trading software. This means that qualifying providers can avoid registration as introducing brokers or associated persons when connecting users to CFTC-registered derivatives firms and exchanges.
The relief, outlined in Staff Letter 26-25, expands on the framework established by the division's initial letter to Phantom Technologies in March 2026. The no-action position does not apply to providers that exercise discretion over order routing or execution, generate express buy or sell signals, or take custody of user assets.
Covered providers can develop and distribute front-end interfaces that let users view market information, review products, and submit orders directly to registered market participants. Trading software models will need to evaluate whether they remain within the passive category or cross into discretionary territory that would trigger registration.